How to Start a Sari-Sari Store with Small Capital in the Philippines

Every country has its own convenience store. The US has “7-Eleven”; Japan has “Family Mart”, “Lawson” and “Ministop” while the Netherlands has “SPAR Express”. The Philippines has “Treats” and “Select” in every Petron and Shell gas station respectively and “All Day” from the Villar group of companies. But perhaps no retail unit is more identified with the Philippines than the Sari-Sari store. It is a profitable business if you know how to start a Sari-Sari store with small capital in the Philippines.

The Sari-Sari store is your local neighborhood convenience store. These are informal businesses that are set up just about anywhere there is good foot traffic. People who want to have a business from their homes or one that does not need much capital will usually opt for a Sari-Sari store.

It is a simple operation. You stock up your store with popularly bought products and merchandise that should be priced more attractively than the larger commercial retail stores. Despite the proliferation of the foreign brands of convenience stores, Filipinos still flock to the Sari-Sari store.

We’ve heard the stories of Sari-Sari store owners who have been able to send their children to school because of this humble and unassuming business. You can make real money with a Sari-Sari store business if you run it professionally. It is possible to start a Sari-Sari store with small capital in the Philippines but be prepared to put in a lot of work and dedication!

Here are the steps on how to start a Sari-Sari store with small capital in the Philippines:

1. What’s in a Name?

Yes, seriously what’s in a name especially for a Sari-Sari store? Naming a Sari-Sari store should be a no-brainer. The formula has withstood the test of time:

Your First Name + “Sari-Sari Store” = Sari-Sari Store Name

If your first name is “Juan”, can you imagine how many “Juan’s Sari-Sari Store” owners there are in the Philippines?

Even if the Sari-Sari store has remained largely unchanged over the last decade, what’s wrong with a little play on names?

Despite being a low capital business, it is still subject to the same principles as every venture. You still need to build your brand and identity, and this begins with the name of your establishment.

Come up with a name that is:

Unique

Relevant

Easy to remember

Sari-Sari stores are known for convenience and affordability. Look for descriptors in the vernacular that will allude to those qualities.

2. Register Your Business.

The biggest oversight Sari-Sari store owners make is not to register their business. They think that because these are recognized as informal businesses, there is no need for it to be registered.

Not only will there be a “need” but there will be great value and future benefits for your Sari-Sari store if you register it as a legal business entity:

You can negotiate better prices and terms with suppliers.

You can open a business account with a bank, have a checking account, start a credit rating and manage your earnings better.

You get tax benefits.

You can register a Sari-Sari store as a sole proprietorship or as a partnership. The agency that attends to this is the Department of Trade and Industry or DTI. Business registration can be done online. Once you register your business with the DTI, your certification will be good for five years.

Remember that if you want your business to prosper, you must manage it like a professional.

3. Find a Great Location.

It is not uncommon for Sari-Sari store owners to set up the business in their homes. If their home has good street accessibility and visibility, all they need to do is knock down a wall. There are many advantages to this:

Saves up on rent.

No need to buy kitchen equipment if you plan to sell meals as well.

Stay closer to the family.

Improvements may cost you 10,000 Pesos depending on the extent of work to be done. The most obvious risk, however, is that your house becomes more open, and you may compromise security.

The next option would be to find a busy sidewalk or any place that has a high volume of foot traffic. Check with the local government if there are zoning restrictions that you should be aware of when looking for potential locations.

The cost of setting up in a location outside your home will be more expensive and will incur a rental expense.